Credit rating scales

Credit rating scales are systems that assess an individual’s or entity’s ability to repay borrowed money. They use letter grades, like AAA (highest) to D (default), or numerical scores, such as 300 to 850. Higher ratings indicate lower risk for lenders, meaning you're more likely to pay back loans on time. These ratings help financial institutions decide whether to lend money and at what interest rate. Good credit ratings can make borrowing easier and cheaper, while lower scores might lead to higher interest rates or difficulty obtaining loans.